[T]he feminist beliefs on which I had built my entire career were shifting under my feet. I had always assumed that if I could get a foreign-policy job in the State Department or the White House while my party was in power, I would stay the course as long as I had the opportunity to do work I loved. But in January 2011, when my two-year public-service leave from Princeton University was up, I hurried home as fast as I could.

A rude epiphany hit me soon after I got there. When people asked why I had left government, I explained that I’d come home not only because of Princeton’s rules (after two years of leave, you lose your tenure), but also because of my desire to be with my family and my conclusion that juggling high-level government work with the needs of two teenage boys was not possible. I have not exactly left the ranks of full-time career women: I teach a full course load; write regular print and online columns on foreign policy; give 40 to 50 speeches a year; appear regularly on TV and radio; and am working on a new academic book. But I routinely got reactions from other women my age or older that ranged from disappointed (“It’s such a pity that you had to leave Washington”) to condescending (“I wouldn’t generalize from your experience. I’ve never had to compromise, and my kids turned out great”). ...

Women of my generation have clung to the feminist credo we were raised with, even as our ranks have been steadily thinned by unresolvable tensions between family and career, because we are determined not to drop the flag for the next generation. But when many members of the younger generation have stopped listening, on the grounds that glibly repeating “you can have it all” is simply airbrushing reality, it is time to talk.

I still strongly believe that women can “have it all” (and that men can too). I believe that we can “have it all at the same time.” But not today, not with the way America’s economy and society are currently structured. My experiences over the past three years have forced me to confront a number of uncomfortable facts that need to be widely acknowledged—and quickly changed.

Before my service in government, I’d spent my career in academia: as a law professor and then as the dean of Princeton’s Woodrow Wilson School of Public and International Affairs. Both were demanding jobs, but I had the ability to set my own schedule most of the time. I could be with my kids when I needed to be, and still get the work done. I had to travel frequently, but I found I could make up for that with an extended period at home or a family vacation.

I knew that I was lucky in my career choice, but I had no idea how lucky until I spent two years in Washington within a rigid bureaucracy, even with bosses as understanding as Hillary Clinton and her chief of staff, Cheryl Mills. ... [T]he minute I found myself in a job that is typical for the vast majority of working women (and men), working long hours on someone else’s schedule, I could no longer be both the parent and the professional I wanted to be—at least not with a child experiencing a rocky adolescence. I realized what should have perhaps been obvious: having it all, at least for me, depended almost entirely on what type of job I had. The flip side is the harder truth: having it all was not possible in many types of jobs, including high government office—at least not for very long. ...

After the speech I gave in New York, I went to dinner with a group of 30-somethings. I sat across from two vibrant women, one of whom worked at the UN and the other at a big New York law firm. As nearly always happens in these situations, they soon began asking me about work-life balance. When I told them I was writing this article, the lawyer said, “I look for role models and can’t find any.” She said the women in her firm who had become partners and taken on management positions had made tremendous sacrifices, “many of which they don’t even seem to realize -- They take two years off when their kids are young but then work like crazy to get back on track professionally, which means that they see their kids when they are toddlers but not teenagers, or really barely at all.” Her friend nodded, mentioning the top professional women she knew, all of whom essentially relied on round-the-clock nannies. Both were very clear that they did not want that life, but could not figure out how to combine professional success and satisfaction with a real commitment to family. ...

I am well aware that the majority of American women face problems far greater than any discussed in this article. I am writing for my demographic—highly educated, well-off women who are privileged enough to have choices in the first place. We may not have choices about whether to do paid work, as dual incomes have become indispensable. But we have choices about the type and tempo of the work we do. We are the women who could be leading, and who should be equally represented in the leadership ranks.

Millions of other working women face much more difficult life circumstances. Some are single mothers; many struggle to find any job; others support husbands who cannot find jobs. Many cope with a work life in which good day care is either unavailable or very expensive; school schedules do not match work schedules; and schools themselves are failing to educate their children. Many of these women are worrying not about having it all, but rather about holding on to what they do have. And although women as a group have made substantial gains in wages, educational attainment, and prestige over the past three decades, the economists Justin Wolfers and Betsey Stevenson have shown that women are less happy today than their predecessors were in 1972, both in absolute terms and relative to men.

The U.S. Court of Appeals for the First Circuit has adopted a deferential standard for reviewing IRS Service collection due process proceedings — one based on reasonableness, not necessarily correctness.

On June 20, a unanimous panel reversed a 2008 U.S. Tax Court judgment [Dalton v. Commissioner, T.C. Memo. 2008-165 and 135 T.C. 393 (2010)] that overruled the IRS's rejection of two taxpayers' offer to settle their tax bill for "pennies on the dollar." It also reversed the Tax Court's award of attorney fees to the taxpayers [T.C. Memo. 2011-136].

Senior Judge Bruce Selya wrote the opinion in Dalton v. Commissioner [No. 11-2217] joined by Chief Judge Sandra Lynch and Judge Michael Boudin. Selya noted that no court has previously parsed the standard a court should apply when examining the IRS's conclusions following a collection due process hearing. The First Circuit found that the "Tax Court employed an improper standard of review with respect to the IRS's subsidiary determinations. Applying a more deferential standard to these determinations consistent with the nature and purpose of the CDP process, we conclude that the IRS did not abuse its discretion when it rejected the taxpayers' offer in compromise."

The Great Recession has wreaked havoc on the job market for law school graduates, but newly released data from the ABA paints a bleaker picture about entry-level employment than previously thought. Slightly more than half of the Class of 2011 — 55% — had found full-time, permanent jobs as lawyers nine months after graduation. It was the worst job market in more than 30 years, according to the National Association for Law Placement. The employment outlook wasn't looking much better for the Class of 2012, but official figures won't be released until next year.

For many 2011 graduates of Illinois law schools the job market was dismal. DePaul, IIT Chicago-Kent, John Marshall, Northern Illinois, Loyola and the University of Illinois did not meet the national average of 55% full-time employment.

This paper discusses the IRS Voluntary Disclosure Practice, including tips for the practitioner. Topics include noisy disclosures and quiet disclosures as well, in some cases, just making no disclosure at all. The article places particular emphasis on the recent offshore financial account voluntary disclosure program and its alternatives.

Legal education is in crisis. A primary reason is that the jobs and high pay that used to greet new attorneys at large firms are gone, wiped away by innovations such as software that takes seconds to do the document discovery that once occupied junior attorneys for scores of (billable) hours while they learned their profession. Too many recent graduates are therefore laden with tuition debt that their salary—if they enjoy one at all—cannot support. (Elite private law-school education carries a tab of $150,000 or so, not including living expenses.) Some newly minted J.D.s have sought poetic justice—by suing their alma maters for inflating postgraduate employment data. Critics from within and without are rightly calling on law schools to provide transparent employment and salary data, to cut the cost of a legal education by trimming course requirements, and to elevate clinical and practical study over the theoretical. And yet these ideas fall short of the rethinking of legal education that the times demand.

To begin with, law schools need to do their best to turn away prospective students who are in it for the money. ... [T]he legal world should look to that hallmark of medical education—the hospital internship. Like medical interns, law interns would not expect to draw high salaries. Law practices could support such programs, which might replace the third year of law school, dramatically reducing tuition costs while giving graduates a chance to live the profession before determining a career path—perhaps unencumbered by a $100,000 debt.

Recently, the Appellate Division of the Superior Court of New Jersey, in Beim v. Hulfish, No. A-5947-10T4 (May 29, 2012), took taxes into account in computing a damage award in a manner that might be a first. ...

On January 25, 2008, a car owned by the first defendant and driven by the second defendant collided with another car owned by a third defendant and driven by the fourth defendant. On February 7, 2008, a 97-year-old passenger in the first car died as a result of the crash. His estate sued the defendants in a wrongful death action. The estate argued that had the decedent lived until 2009, his estate’s federal estate tax liability would have been $626,083 less than what the estate paid in 2008, and that had the decedent lived until 2010, the entire $1,196,084 of estate taxes paid in 2008 would have been avoided.

As the court nicely put it, “The novel issue presented is whether an heir's loss of a prospective inheritance resulting from the imposition of increased estate taxes — incurred due to the premature death of a decedent — is recoverable in a wrongful death action.” The court concluded that “[b]ecause such a tangible, readily-calculable diminishment in an heir's expectancy is in the nature of "pecuniary injuries resulting from such death," N.J.S.A. 2A:31-5, we conclude that it is an element of damages for the jury to consider in this case, subject to appropriate expert evidence.” The court reversed and remanded the case.

The trial court had dismissed the estate’s claim for damages reflecting the estate taxes because they were “too speculative in nature.” It based its conclusion on the uncertainty, at the time, about whether the estate tax would resurface in 2010, and on the actuarial probability that the decedent would have lived beyond 2010. Nine days later, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 went into effect, prompting the estate to move for reconsideration. It argued that with the estate tax structure for 2008 through 2012 having been established, speculation was no longer a concern in the computation of damages, because the actuarial tables “suggested that [the decedent] would pass away during this time period.” The trial court denied the motion for reconsideration, concluding that the 2010 Act “did not cure the speculative nature of the impact of estate taxes because ‘the rights and liabilities of the parties are fixed as of the date of the tort or wrongful death.’ ”

The court noted that its research turned up only three reported state court decisions that addressed the status of estate taxes under wrongful death statutes. In Elliott v. Willis, 442 N.E.2d 163 (Ill. 1982), the court held that premature payment of estate taxes was not a recoverable loss in a wrongful death action because “[t]he test is a measurement of benefits of pecuniary value that the decedent might have been expected to contribute to the surviving spouse and children had the decedent lived.” In Farrar v. Brooklyn Union Gas Co., 537 N.Y.S.2d 26 (N.Y. 1988), the court held that federal estate tax credits that the decedent would have received had he lived longer could not be recovered in a wrongful death action absent express legislative authority.” In Lindsay v. Allstate, 561 So.2d 427 (Fla. Dist. Ct. App. 1990), the court held that the loss of prospective federal estate tax credits as a consequence of an insured's premature death was not an element of damages under the Florida Wrongful Death Act. Despite these decisions, the New Jersey court concluded that “they reflect neither the view of our Legislature nor the expansive scope of our wrongful death jurisprudence.”

In response to one court’s concern that “Trial strategies and tactics in wrongful death actions should not be allowed to deteriorate into battles between a new wave of experts consisting of accountants and economists in the interest of mathematical purity and of rigid logic over less precise common sense,” the New Jersey court stated that “The New Jersey Supreme Court does not share the view that providing expert tax opinions to juries on the question of pecuniary injuries injects impermissible speculation and conjecture in wrongful death actions.” In reaching this conclusion, the court was not swayed by the rationale provided for prohibiting computation of tax liabilities caused by premature death.

This Note will argue that a museum director, or other executive of a cultural institution, ... should not be able to exclude from his gross income the value of housing provided for him by his museum employer. Part I will provide a history of Section 119, the provision of the Internal Revenue Code that these directors look to for excluding the value of housing from gross income. This part will include a brief discussion of Section 119's legislative history and the reasons behind its enactment in 1954. Next, Part II will illustrate the three “elements” of Section 119, which must all be satisfied to qualify for the exclusion. This part will include several examples of how regulations, rulings, and judicial decisions have interpreted each element, and the standards that have been applied. Part III applies these interpretations to a museum director's treatment of housing, and argues that based on current case law, the value of housing should be included income. Finally, Part IV concludes that though Section 119 is a necessary provision designed to alleviate the burden on those in unique professions, it does not serve the purposes of the Section to exclude the value of housing from a museum director's income.

The IRS will review its tax whistle-blower program to improve its backlog and working practices, after the program came under fire from politicians and lawyers.

The IRS will work with “internal and external stakeholders” on a “comprehensive review” of the agency’s guidelines and procedures for handling whistle-blower complaints, Deputy Commissioner for Services and Enforcement Steven T. Miller said in a two-page memo to senior IRS officials posted on the agency’s website yesterday. Miller also set 90-day deadlines for the agency to review whistle-blower claims, which can take at least seven years to resolve.

The IRS whistle-blower program was created by Congress in 2006 to boost tax revenue by rewarding tipsters for information. Instead, it’s become the place where allegations of tax avoidance go to die, Bloomberg reported on June 19.

In the end, after you've stripped away their six-figure degrees, their state bar memberships, and their proclivity for capitalizing Odd Words, lawyers are just another breed of knowledge worker. They're paid to research, analyze, write, and argue -- not unlike an academic, a journalist, or an accountant. So when software comes along that's smarter or more efficient at those tasks than a human with a JD, it spells trouble.

That's one of the issues the Wall Street Journalraised yesterday in an article on the ways computer algorithms are slowly replacing human eyes when it comes to handling certain pieces of large, high-stakes litigation. It focuses on a topic that is near and dear to the legal industry (and pretty much nobody else) known as discovery, which is the process where attorneys sort through troves of documents to find pieces of evidence that might be related to a lawsuit. While it might seem like a niche topic, what's going on in the field has big implications for people who earn their living dealing with information.

The discovery process is all about cognition, the ability of people to look at endless bails of info and separate the wheat from the chaff. For many years, it was also extremely profitable for law firms, which billed hundreds of dollars an hour for associates to glance at thousands upon thousands (if not millions) of documents, and note whether they might have some passing relevance to the case at hand. Those days are pretty much dead, gone thanks to cost-conscious clients and legal temp agencies which rent out attorneys for as little as $25-an-hour to do the grunt work. Some firms are still struggling to replace the profits they've lost as a result.

And now comes the rise of the machines -- or, more precisely, the search engines. For a while now, attorneys have employed manual keyword searches to sort through the gigabytes of information involved in these case. But as the journal reports, more firms are beginning to use a technology known as "predictive coding," which essentially automates the process at one-tenth the cost. Recently, a magistrate judge in a major Virginia employment discrimination suit ruled that the defense could use predictive coding to sort through their own data, despite objections by the plaintiffs who worried it might not pick up all the relevant documents (Probably left unspoken here: plaintiffs in lawsuits also like to drive up the costs for defendants, in the hopes that it will encourage them to settle). In truth, researchers have found predictive coding to be as accurate, if not more so, than the attorneys its replacing.

Loopholes in the law are weaknesses that allow the law to be circumvented. Once created, they prove hard to eliminate. A case study of the evolving tax unit used in the federal income tax explores policymakers’ response to loopholes. The 1913 income tax created an opportunity for wealthy married couples to shift ownership of family income between spouses, then to file separately, and, as a result, to reduce their collective taxes. In 1948, Congress reluctantly closed this loophole by extending the income-splitting benefit to all married taxpayers filing jointly. Congress acted only after the federal judiciary and Treasury Department pleaded for congressional reform and, receiving none, reduced their roles policing wealthy couples’ tax abuse. The other branches would no longer accept the delegated power to regulate the tax unit. By examining these developments, this article explores the impact of the separation of powers on the closing of loopholes and adds to the understanding of how the government operates. It concludes that when policies produce loopholes that are not politically salient, the system may operate for the greater good for a time, but there is a limit to how long policymakers will accept a delegation of responsibility.

That’s why I’ve decided to go to law school. Like little Charlie Bucket in Willie Wonka’s Chocolate Factory, I believe my golden ticket is my big chance to make my way. Against popular opinion, and even the ABA’s reports on the unemployment rate for newly minted J.D.s, I still romantically believe that law school has value and presents opportunities I may not have otherwise....

My dreams will more than likely shatter the first time my professor calls on me to render me just another victim of the Socratic Method.

But, for the summer, I will indulge in the hope and fresh excitement of feeling like the keys to the kingdom are about to get handed to me.

It’s my turn.

Jessi Freud is in her last semester of master’s degree work in Public Administration at Pennsylvania State University. She graduated from Florida State University with a bachelor of arts in English literature. Prior to enrolling in her master’s program, she was a communications aide in the Florida Governor’s Office and worked in cable news. This fall, Jessi will begin her first year at the Shepard Broad Law School at Nova Southeastern University.

15 law schools did not report a single 2011 grad with a BigLaw job: Appalachian, Charlotte, CUNY, John Marshall-Atlanta, Liberty, North Carolina Central, Phoenix, Regent, Arkansas-Little Rock, Hawaii, New Mexico, South Dakota, District of Columbia, Wyoming, and Western New England.

We are constructing our future, here in the present. We have many excellent technologies, but figuring out how to use them to serve the educational, scholarly, professional and public service missions of law school is an ongoing challenge. This year’s theme is a double entendre meant to explicitly evoke that our future is not pre-packaged or purchased from a vendor -- some assembly is required to make the pieces fit into our institutional cultures.

A broad swath of official economic data shows that America and its people are in much worse shape than when we paid higher taxes, higher interest rates and made more of the manufactured goods we use.

The numbers since the turn of the millennium point to even worse times ahead if we stay the course. Let’s look at the official numbers in today’s dollars and then what can be done to change course.

First, incomes and jobs since 2000 measured per American: IRS data show that average adjusted gross income fell $2,699 through 2010 or 9%, compared to 2000. ... Wages per capita in 2010 were 4.3% less than in 2000. ... In May, nearly 23 million workers, 14.8%, were jobless or underemployed, the Bureau of Labor Statistics reported. ... Now let’s look at debt per American since 2000 using Federal Reserve data:

Mortgage debt grew 51% through 2010, even though incomes and wages fell, which should result in steady or lower housing prices, not higher prices. ...

And what of taxes? ... [M]easured per capita, the IRS data show a pattern of shrinking numbers, with modest upticks in 2010. Individual income taxes in 2010 averaged $2,995, down $1,654 or almost 36% from 2000. ...

The bottom line: less income, hardly any more jobs, sharply increased mortgage debt and Washington ledgers awash in red ink as voters are asked to endorse even more tax cuts.

How many years of evidence does it take to establish that a policy worked or failed? Will continuing our current tax, credit and trade policies produce favorable results in the future? Will they produce higher incomes?

My reading of this and tons more data is that the Bush tax cuts utterly failed, the Fed’s artificially low-interest rate policies under presidents Bush and Obama do far more damage than good (especially to savers), and that the United States is harmed both by the imbalance in the trade relationship with China and scores of trade agreements with South Korea and other low-wage countries that are deeply flawed at best.

We need to recognize that the tax cutters were snake oil salesmen, the Federal Reserve an enabler of damaging debts and that bilateral trade deals are written of, by and for global financiers, not workers.

The Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2012 (collectively referred to as the ACA) were both signed into law in March 2010 and together contain over 500 provisions. Over 40 of these provisions added to or amended the Internal Revenue Code, and provide incentives and tax breaks to individuals and small businesses to offset health care expenses. They also impose penalties, administered through the tax code, for individuals and businesses that do not obtain health care coverage for themselves or their employees. The IRS’s role is to implement and administer the various tax provisions included in the ACA -- a major challenge as the ACA is the largest set of tax law changes in more than 20 years and affects millions of taxpayers.

TIGTA conducted this audit because the IRS is responsible for overseeing a significant part of the legislation that includes, but is not limited to, administration of additional taxes, penalties, and fees on individuals and employers; determinations of various exemptions from those taxes; and oversight of new information reporting requirements. The new taxes, fees, and penalties account for approximately $438 billion. TIGTA’s overall objective was to assess the IRS’s overall planning to implement the tax provisions of ACA. ...

The IRS projected its Fiscal Years 2012 and 2013 ACA staffing needs to be 1,278 Full-Time Equivalents and 859 Full-Time Equivalents, respectively. The IRS has not projected staffing needs beyond Fiscal Year 2013. The lack of documentation to support the staffing requirements needed to implement the ACA precluded TIGTA from providing an opinion on the adequacy of staffing requests to support implementation. The IRS did not analyze each provision to determine the amount of staffing necessary to implement the provision.

Citizenship-based taxation was first enacted during the Civil War, in large part to express Congressional disapproval of wealthy individuals who fled abroad to avoid bearing the financial and physical burdens of the war. A century later, motivated by a desire to encourage foreign investment in the United States, Congress passed legislation in 1966 that offered significant tax incentives to nonresident aliens, thereby creating an opportunity for tax abuse. To discourage U.S. citizens from expatriating to avoid U.S. taxation, Congress contemporaneously enacted § 877, which taxes expatriates on certain U.S.-source income for a ten-year period after expatriation. Congress, and the nation, viewed these tax-motivated expatriates as “economic Benedict Arnolds.” This Article follows the history and evolution of § 877, the alternative tax regime, as Congress addressed the weaknesses of this provision, and the politics of the replacement by Congress of this provision with § 877A, imposing a mark-to-market regime (an exit tax) on U.S. citizens and long-term residents expatriating after June 2008. Along with a close examination of the federal income tax consequences of expatriation under both regimes, the gift and estate tax consequences of expatriation are also developed. Additionally, this Article explores the validity of §§ 877 and 877A in relation to the U.S. Constitution and existing tax treaties. It then discusses the administrative and enforcement issues arising under the mark-to-market regime, and the administrative and enforcement issues still remaining under the alternative tax regime. Finally, the general social and economic fairness of the alternative tax regime and the mark-to-market regime is explored. Although § 877A is an improvement over the harshness of the alternative tax regime, the mark-to-market regime still violates the tax equity objectives of horizontal and vertical equity, resulting in unintended tax winners and losers.

[D]espite the most competitive job market for new lawyers in a generation, pre-law students continue to place a much higher premium on where a law school places in the rankings than on how many of its graduates land jobs in the legal field. When asked “What is most important to you when picking a law school to apply to?”, 32% cited a law school’s ranking; followed by geographic location at 22%; academic programming at 20%; and affordability/tuition at 13%. At nearly the back of the pack? A law school’s job placement statistics, which came in at 8%. When Kaplan first asked the same question in October 2010, these factors ranked in the same exact order –- though a school’s ranking actually increased in importance in this most recent survey.

In a related question asking, “How important a factor is a law school’s ranking in determining where you will apply?” 86% say ranking is “very important” or “somewhat important” in deciding where to apply to –- the same exact percentage as in October 2010.

On the jobs front, 38% of pre-law students surveyed said they hoped to work in Big Law, where often the big money is [although only 10% of the Class of 2011 landed jobs in Big Law]; 31% said they wanted to go into public interest law [only 6% of the Class of 2011 landed public interest law jobs; an additional 10% landed government law jobs]; 23% said they wanted to work for a boutique firm. And showing the versatility of a law degree, 23% said they wanted to use their JD to go into politics at some point; another 23% said they wanted to use their degree for business purposes. Their career aspirations closely mirror what their pre-law predecessors told Kaplan when asked the same question in an October 2010 survey.

“While it may seem counterintuitive that pre-law students aren’t placing greater importance on a school’s job placement stats, most applicants know that there is a direct correlation between where a student graduates from, their starting salary and career prospects, which is likely why rankings are consistently the most important consideration by far,” says Jeff Thomas, director of pre-law programs, Kaplan Test Prep.

Completion is the sine qua non of gift taxation. A grantor's retained control over transferred property (intentionally or unintentionally) may cause a gift to be incomplete for gift tax purposes. This is true even if the grantor has no beneficial interest in transferred property. Powers that typically cause completion problems are discretionary powers over income or principal, and the ability to add or delete trust beneficiaries. Completion problems can be avoided, however, if the grantor’s power is limited by an ascertainable standard or if the power is subject to the consent of another party having a substantial and adverse interest in the transferred property.

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Skepticism about the potential of moral appeals relating to tax compliance -- for example, as applied to large groups of individual taxpayers outside a wartime context -- has resulted in the absence of a theory about how salient government communication can further tax compliance. This Article fills that gap. It provides a comprehensive theory of tax compliance and norm formation under high-penalty regimes from the starting point of a non-compliance norm.

The theory explains the roles of and mutually reinforcing relationships between the compliance mechanisms of deterrence, separation and reputation signaling. The success of these mechanisms depends on the presence of all three of taxpayer perception of penalty imposition, taxpayer perception of detection efficacy, and an absence of close substitutes. Either government enforcement or a reputation market can provide taxpayer perception of penalty imposition and detection efficacy. The Article offers the U.S. requirement of self-reporting of offshore bank account information as an example of a potentially effective high-penalty regime founded on aggressive and creative government enforcement efforts.

The theory also defines an appropriate role for expressive law in advancing tax compliance. This role has relevance, at least, when resources have been committed and government enforcement is not practical. The theory suggests that using law to define good-reputation indicators and trigger compliance mechanisms (including deterrence and separation as well as signaling) has particular promise when applied to reputation-sensitive taxpayers such as large intermediaries. The Article identifies four expressive law tax compliance tactics: reputation referencing, salience, management targeting, and incrementalism. It illustrates the expressive law portion of the theory with the example of a recently passed law that would require non-U.S. banks to identify U.S. account holders or face withholding on certain U.S. source income.

In Freedom From Religion Foundation v. Geithner, the Freedom From Religion Foundation (FFRF) argues that § 107 and the income tax exclusion that section grants to “minister[s] of the gospel” for parsonage allowances violate the Establishment Clause of the First Amendment. This case has important implications for a new federal law mandating that individuals maintain “minimum essential” health care coverage for themselves and their dependents. That mandate contains two religious exemptions. One of these exemptions incorporates a pre-existing religious exemption from the federal self-employment tax. These sectarian exemptions raise the same First Amendment issues as does the Code’s exclusion from gross income of clerical housing allowances.

I ultimately find unpersuasive the indictment of § 107 as constitutionally entangling. For the same reasons, I also conclude that the religious exemptions of the Social Security taxes and of the individual health mandate pass First Amendment muster. In the modern world, extensive contact between tax systems and religious institutions is unavoidable. Whether religious entities and actors are taxed or exempted, there are inevitable tensions between the contemporary state and sectarian institutions and their personnel. Whether religious entities and actors are taxed or exempted, there are no disentangling alternatives, just imperfect trade-offs between different forms of entanglement.

Thus, § 107 and the exclusion from gross income it grants to clerical recipients of housing and parsonage allowances are constitutionally permitted, though not constitutionally required, responses to the problems of entanglement inherent in the relationship between modern government and religion. Similarly, the Code’s sectarian exemptions from the individual health care mandate and from the FICA and self-employment taxes are acceptable, though not obligatory, means under the First Amendment of managing the inevitable contacts and tensions between the contemporary state and the religious community.

However, as a matter of tax policy, the exclusion of § 107(2) for cash parsonage allowances stands on weaker ground than does the exclusion of § 107(1) for in-kind housing provided to “minister[s] of the gospel.” The taxation of such cash allowances, in contrast to the taxation of housing provided in-kind, does not involve problems of valuation or of taxpayer liquidity and is thus more practicable as a matter of tax policy.

Recent levels of violence in Mexico have caused certain of its citizens who do not hold permanent U.S. residency status (and who may not intend to reside in the United States permanently) to spend more time in the United States. By doing so, these individuals create the risk that they will become U.S. residents for U.S. tax purposes, thereby subjecting their income to worldwide taxation by the United States (as well as creating potential U.S. estate and gift tax issues). This paper explores whether there is relief available to such individuals under U.S. domestic law (the “substantial presence” test and its various exceptions). It also explores whether Mexican nationals can obtain relief from U.S. residency under the terms of the United States-Mexico income tax treaty. The paper concludes that it is less than clear whether relief is available; in particular, it is not clear whether the tax authorities or the courts may consider violence in the person’s home country in determining whether the individual is a U.S. tax resident. The paper then goes on to propose various statutory changes to the law to allow the tax authorities to provide relief and certainty on the question of U.S. tax residency to individuals who are present in the United States merely to avoid violence at home. The paper argues for such relief on the basis that imposing worldwide U.S. taxation and tax reporting obligations on Mexican nationals present in the United States merely to avoid danger at home is inequitable given the contributions of U.S. policy to the violence in Mexico.

On June 11, the Federal Reserve published the latest results of its triennial survey of consumer finances. News reports focused on the decline in the median net worth of all families to $77,300 in 2010 from $126,400 in 2007, reflecting the devastating impact of the financial crisis. The data also demonstrates that there is some fluidity in income mobility at both the top and the bottom of the income tables.

The table below is from the Fed report. It examines the income of families in 2007 and the same families in 2009, distributed in 20 percent brackets. ...

On June 15, the conservative Tax Foundation published data on the mobility of millionaires, that is, those reporting at least $1 million of adjusted gross income. ...The table below from the Tax Foundation study shows that half of those who reported $1 million or more of income did so only once between 1999 and 2007, 15% did so twice and only 6% did so every year. ...

Earlier this month, the IRS published new data on income mobility among the 400 taxpayers with the largest adjusted gross incomes -– those over $77 million in 2009. This data has been compiled for 18 years, and the IRS is able to tell which members have been on the list multiple years by tracking their Social Security numbers. ... As the table below indicates, over the full 18-year period, a total of 3,869 different taxpayers have appeared on the IRS Top 400 list. Of this number, 2,824, or 73%, have appeared only once; 458, or 12%, have appeared twice, not necessarily consecutively, and so on. Only 87 taxpayers, or just over 2% of all those who have ever appeared in the Top 400, have been on the list for 10 years or more.

It is indisputable that the distribution of income in the United States has become more unequal. However, many economists say they believe that turnover among both the poor and the rich substantially mitigates its impact. If everyone remained in the same income bracket year after year, the negative effects of inequality would be far worse.

The IRS whistle-blower program -- created by Congress in 2006 to boost tax revenue by giving incentives to tipsters -- has become the place where allegations of tax avoidance go to die. Over the past five years, more than 1,300 claims have been filed against almost 10,000 companies and individuals, alleging tax underpayments of at least $2 million apiece.

Just three awards have been paid. The IRS won’t disclose the total dollar amount. Taxpayers annually owe $385 billion more than the IRS is able to collect, the agency said.

By contrast, the U.S. Treasury has recovered more than $21 billion since 1986 due to whistle-blower tips under a similar law that covers other federal agencies. ... The IRS is “demoralizing whistle-blowers” Senator Charles Grassley, who sponsored the whistle-blower law, wrote to Treasury Secretary Timothy F. Geithner in April. “The IRS does not have a problem attracting whistle-blowers. The IRS’s current problem is processing and compensating whistle-blowers in a timely manner,” said Grassley, an Iowa Republican. As a result, “I am now concerned that whistle-blowers will stop coming forward.”

Even as the U.S. grapples with a $1.2 trillion budget deficit, the IRS won’t aggressively pursue whistle-blower tips because of fears that will spur accusations from Congress of heavy-handed enforcement, said Bryan Skarlatos, a tax-litigation lawyer at Kostelanetz & Fink LLP....

The reluctance of the IRS to talk directly to whistle-blowers is common, according to lawyers who file such claims. “You have an agency that is virtually completely non- communicative,” said Erika A. Kelton, an attorney at Phillips & Cohen LLP in Washington, which represents about 40 tax whistle-blowers. Since sophisticated tax shelters are complex, “when you have an insider who can shortcut things for you, why not take him up on it?”

The IRS generally doesn’t permit its most knowledgeable examiners -- field agents handling audits -- to speak to the whistle-blowers at all, the agency says. That is because of fears of accidentally sharing confidential information with whistle-blowers, said Marty Basson, an attorney who retired last year from the IRS office that handles those claims.

UC-Davis seeks to hire entry-level and experienced tax faculty for tenure-track and tenured positions to commence in Fall 2013:

We seek applications from candidates with scholarly distinction or promise and a commitment to excellence in teaching. The positions will remain open until filled, but candidates are encouraged to apply as soon as possible in order to receive maximum consideration. The committee will attend the Faculty Recruitment Conference; candidates with a particular interest in UC Davis are encouraged to contact us directly. ... Interested candidates should send a cover letter and resume to Jack Chin (Chair, Faculty Appointments Committee) or Dennis Ventry. Inquires about possible visiting positions should be submitted separately to Associate Dean for Academic Affairs Vikram Amar.

There are three distinct types of tax policy: distributive, regulatory, and redistributive. Each type is made in a different political arena, by different political actors and for different purposes. Further, each policy arena is characterized by its own distinctive pattern of politics, decision-making, and interaction among the participants. Pollack delineates the characteristics of the three types of federal tax policy and then links them to their own political arena. The goal is to explain how the separate policy streams converge to form what we refer to as ‘‘federal tax policy.’’

All Tax Analysts content is available through the LexisNexis® services.

Law schools will always manipulate whatever metric U.S. News employs in its ranking, ethics be damned. But ethics for the moment aside, the most harmful consequences wrought by these machinations lie beneath the surface. To increase their LSAT medians, law schools have shifted the bulk of scholarship awards away from need-based to merit-based. In other words, students from wealthy families used to pay full price, while students from less well-off families would receive scholarships. Now those who score below the median on the LSAT are the ones paying full fare, while those who score above get financial aid, whether or not they need it.

It’s a reverse-Robin Hood redistribution scheme: Since well-off students tend to do better on the LSAT due to advantages throughout their education (including their ability to afford test prep courses that improve their LSAT score), the students likely to earn the least in their careers end up defraying the educational expenses of the students who will earn the most. This manner of allocating scholarships also systematically funnels students from wealthy families to higher-ranked schools and students from middle-class families to lower-ranked schools (you can forget about the poor). ...

It is inevitable that the elite legal positions in the coming generation —- in the Supreme Court, Justice Department, corporate bar, and law professoriate —- will be dominated by children of the wealthy. Pursuing prestige and revenue without heed to the consequences, legal educators are responsible for this. Yes, the rankings are a part of it, but in the end they are just numbers; human beings choose how to use —- or misuse -— them. The sad irony is that many law professors are liberals who claim to fight for the less privileged in society, yet through our own conduct we are further enhancing the advantages of the one percent.

This document ... provides a description and analysis of the revenue provisions modifying the Internal Revenue Code of 1986 that are included in the President’s fiscal year 2013 budget proposal, as submitted to the Congress on February 13, 2012. The document generally follows the order of the proposals as included in the Department of the Treasury’s explanation of the President’s budget proposals. For each provision, there is a description of present law and the proposal (including effective date), an analysis of policy issues related to the proposal, and a reference to relevant prior budget proposals or recent legislative action.

The American Bar Association Section of Legal Education and Admissions to the Bar and the Law School Admission Council today informed law school deans about a program for schools to certify the accuracy of their reporting of entering-class academic credentials.

“Many schools have expressed an interest in such a program,” said John O’Brien, chair of the Council of the ABA Section of Legal Education and Admissions to the Bar. “In an environment where the actions of a few schools [Illinois, Villanova] have raised questions in the minds of some about the integrity of data reporting by law schools more generally, this program gives schools a straightforward and efficient method to have their admissions data verified and to assure that they are accurately reporting admissions data to the ABA and to the public. We appreciate the efforts of the LSAC to make this possible.”

To make the certification program possible, the ABA is now requiring schools to report their information about their first-year students. The ABA and LSAC will use these reports to correlate and cross-check students and provide to schools that request it a report of their entering-class credentials. Reports for each school will include the 25th, median and 75th percentile undergraduate grade point averages and LSAT scores.

Although law schools will now be required to provide entering-student data in the ABA Annual Questionnaire each fall, participation in the certification process is voluntary and is being offered on a pilot basis for the 2012-13 academic year at no cost. Law schools that receive voluntary certification of their students’ credentials from the ABA and LSAC are free to publicize that fact, giving further assurance about the accuracy of the data.

The ABA data shed considerable light on how poorly the 2011 graduates fared. We can now say with certainty that the employment picture is far worse than previously reported. Only 55.2% of all graduates were known to be employed in full-time, long-term legal jobs. A devastating 26.4% of all graduates were underemployed.

Here are the Top 25 and Bottom 25 law schools ranked by the percentage of the Class of 2011 with full-time long-term legal jobs:

School (U.S News Rank)

Full-Time Job %

School (U.S News Rank)

Full-Time Job %

1

Virginia (7)

94.7%

171. Phoenix (Tier 2)

37.4%

2

Columbia (4)

94.1%

172. Southern (Tier 2)

37.1%

3

Stanford (2)

91.1%

173. CUNY (113)

36.9%

4

NYU (6)

90.1%

174. Detroit (Tier 2)

36.8%

5

Harvard (3)

90.1%

175. Florida Coastal (Tier 2)

36.6%

6

Chicago (5)

88.2%

176. Toledo (129)

36.5%

7

Yale (1)

87.8%

177. N. Kentucky (Tier 2)

36.3%

8

Pennsylvania (7)

84.3%

178. Pace (142)

36.0%

9

Duke (11)

82.1%

179. American (49)

35.5%

10

G. Washington (20)

81.3%

180. NY Law School (135)

35.5%

11

LSU (79)

81.3%

181. Quinnipiac (113)

34.6%

12

UC-Berkeley (7)

80.0%

182. Southwestern (129)

34.6%

13

St. Mary's (Tier 2)

78.3%

183. New England (Tier 2)

34.4%

14

Alabama (29)

78.0%

184. San Francisco (106)

34.2%

15

Northwestern (12)

77.0%

185. Florida A&M (Tier 2)

34.2%

16

Cornell (14)

76.1%

186. Ave Maria (Tier 2)

33.0%

17

Michigan (10)

75.5%

187. La Verne (Tier 2)

32.8%

18

Mississippi College (Tier 2)

75.3%

188. Western St. (Tier 2)

32.2%

19

Arizona (43)

75.3%

189. Liberty (Tier 2)

31.1%

20

Vanderbilt (16)

73.7%

190. Appalachian (Tier 2)

30.8%

21

Kentucky (62)

71.9%

191. Western N.E. (Tier 2)

30.1%

22

Campbell (Tier 2)

71.4%

192. T. Jefferson (Tier 2)

26.0%

23

Baylor (51)

70.1%

193. Golden Gate (Tier 2)

22.0%

24

Texas (16)

69.9%

194. D.C. (Tier 2)

20.5%

25

Florida State (51)

69.5%

195. Whittier (Tier 2)

17.1%

Schools ranked in the U.S. News Top 35 with the largest underperformance in the full-time long-term legal job rankings:

"This is not a career-enhancing book, and people early on told me not to write it for that reason," Tamanaha said before the book's June 15 release. The blunt title, Failing Law Schools, tells why. Its central argument is that going to law school is a raw deal for most students. Tamanaha and other law professors and administrators who have watched graduates struggle with debt, declining career prospects and stagnant salaries hope the book's dissection of the problem will jolt colleagues out of complacency. ...

Failing Law Schools essentially flips the standard script on the rising cost of legal education. Bloated faculties of overpaid professors, the gaming of the U.S. News & World Report rankings and reams of academic scholarship pumped out each year actually are the effects of increased tuition revenue, not its root cause, Tamanaha argues.

The real culprits (the average public school tuition is now $22,116 per year, with private schools costing an average $39,184, according to the ABA) are high demand and the fact that for years law schools have been able to raise tuition beyond the rate of inflation and still turn away potential students, he writes.

Average Law School Tuition:

But others view the book as just the latest overly dire prediction about the fate of law graduates and misplaced finger-pointing over tuition costs. "Most people in the profession were already concerned about what it costs to get a law degree," said John O'Brien, dean of the New England School of Law and chairman of the ABA's Council of the Section of Legal Education and Admissions to the Bar. "Nobody feels good that tuitions have gone up. But the claim that a law degree is a bad investment doesn't hold water."

Perhaps the freshest information in Failing Law Schools comes from Tamanaha's attempts to use recent job data, salary figures and debt estimates to calculate whether a law degree is worth the cost of attendance for most students. These are chapters the author hopes will find their way to would-be law students via pre-law counselors.

That equation will work out well for certain students — namely, graduates of elite law schools who land high-paying corporate law jobs, or those able to keep their debt loads below $50,000. Flagship state schools with tuition below $20,000 are a fairly good bet, he writes, recommending against any debt load above $150,000 for anyone not attending a school ranked within the top five. ...

Failing Law Schools faults the federal loan system for making it far too easy for law students to borrow tuition money, even if going to law school makes no sense for them. Tightening the availability of such loans, or at least enacting accountability standards for schools whose recent graduates are struggling to pay back their loans, would force law schools to get serious about cost containment, Tamanaha argues. Specifically, the government could cap the amount of federal loans any individual law student or law school could take out, or it could stop lending to any law school where a third or more of graduates can't pay back the loans they took out.

Average Amount Borrowed by Law Grads:

Although Tamanaha's concern over high law school costs is justified, his suggested reforms of the federal student loan system "is fairly simplistic and misses some key points," said Terry Hartle, senior vice president for the government and public affairs division of the American Council on Education. ... [R]educing access to federal student loans could prevent law schools from admitting lower-income students. "We could inadvertently make things worse," Hartle said.

In Failing Law Schools, Brian Tamanaha argues that law school is no longer a realistic option for most students, who emerge deeply in debt and with slim prospects for well-paying legal jobs. Here are his arguments in summary:

The causes:

For decades, high dem­and for seats in law schools has allowed them to raise tuition far beyond the rate of inflation.

The ABA historically has been dominated by legal educators who advance their self-interest through features including faculty tenure and a three-year J.D. curriculum that drive up educational costs.

Pressure to maintain or improve their U.S. News & World Report ranking resulted in administrators prioritizing factors that weigh in the rankings formula regardless of their cost to students.

Law schools funneled money into merit scholarships to lure students with high SAT scores and GPAs. This improved their U.S. News rankings but left the bottom half of the class subsidizing the top half.

Tuition at public law schools has increased by an average 10% per year since 1987; average tuition at private law schools, already higher than at public schools, increased by $15,000 in the past 10 years. Average graduate debt loads have skyrocketed, topping out at $145,621 at California Western School of Law in 2010.

Servicing law school loans has become more difficult, given the recession, but schools are struggling to place their graduates in legal jobs. Since at least 2001, about one-third of law graduates have failed to land jobs as lawyers.

About half or more of the law graduates of 2010 would likely qualify for Income Based Repayment — a federal hardship program.

The solutions:

Legal educators must recognize that law schools are in a crisis and must advocate for change from within.

The ABA should de-emphasize faculty tenure and academic scholarship, allowing for greater differentiation between law schools and the emergence of cheaper, teaching-based law schools.

The federal government should cap either the amount of money each law student may receive in federal loans or the total going to any single law school. The Department of Education should demand greater accountability, stripping federal loan-program eligibility from law schools with high percentages of graduates who cannot repay their loans.

To see what I mean we need look no further than Dean O'Brien's own institution, New England School of Law. Nine months after graduation, only 34.4% of the 2011 class had obtained full time, permanent lawyer jobs (see ABA data broken down here). The average debt for 2011 NE law grads was $120,480 (90% of the class had debt). NE claims that the median salary in the private sector for the class of 2010 was $67,500, but only 15% of the grads in private employment reported their salaries so the actual median salary for the class is undoubtedly much lower. People who earn that much will struggle to make the monthly payments ($1,400) due on the average debt. (Meanwhile, Dean O'Brien received $781,710 in total compensation in 2009.)

O'Brien currently heads the ABA's Council of the Section of Legal Education, whose regulatory mission is to decide whether it's a good idea for John O'Brien to get paid ... $867,000 per year to run a law school with these outcomes for its graduates.

The state corporate income tax has been and remains a vital source of income for the states. The theoretical justifications for this tax, however, are weak and, as reasonably predicted based on its poor design, the state corporate income tax has been in decline as a source of state revenue for decades. Nevertheless, states have taken important steps to shore up their corporate income taxes. At least one of these major reforms, apportioning the state corporate income tax base on the basis of in-state corporate sales, was probably undertaken on the basis of implausible policy arguments. Despite the ad hoc (at best) nature of these reforms, they have changed the state corporate income tax for the better. An initial goal of this Article is to collect this positive news at a time when most fiscal news remains bleak.

The argument at the heart of this Article starts from the analytical observation (first made by Charles McLure) that these changes to the state corporate income tax have made the tax into an odd type of sales (consumption) tax. This Article then argues that this observation is important because this new corporate income tax is reaching sales on which no retail sales tax is due (e.g., most services) and sales on which no retail sales tax is generally remitted (e.g., sales made by certain internet retailers). This means that the new corporate income tax is acting not only like a sales tax, but as a complement to poorly designed state sales taxes. This Article argues that, assuming that states will not act directly to broaden their sales tax base, they can act to broaden their consumption tax base indirectly through their corporate income taxes.

Senator Max Baucus [D-MT] made some noise this week when he announced that he had turned his attention to an overhaul of the United States tax code. Not only is the Chairman of the Senate Finance Committee going to address the systemic problems facing the nation’s revenue machine, but he is going to do it in the face of taxmageddon. Also known as the ‘fiscal cliff’, the slew of changes to current tax policy scheduled for January 1, 2013 are quite drastic. Senator Baucus may be correct in assuming that this presents an opportunity for meaningful reform that has not occurred since the 1986 tax code restructuring.

Reforming the corporate tax code was one of the central pillars of Baucus’s ‘Tax Code for the 21st Century’. This isn’t surprising given that talking points on both sides of the aisle have consistently advocated for reconstructing the corporate tax code to either make corporations pay their fair share or increase international economic competitiveness. These talking points have generally understated the issue at hand, but in his remarks to the Bipartisan Policy Center, Baucus made no such miscalculation:

Today, the code is certainly not beautiful. Instead, it reminds me of Hydra, the mythical beasts with hundreds of heads. Each time you cut one off, two more grow back.

With Greeks heading to the polls tomorrow and the future of Greece’s membership in the euro zone in question, there’s been a lot of talk about taxes—or more precisely, how Greek tax evasion has contributed to the country’s current fiscal woes. It turns out, however, that for tax geeks there’s another issue here: should Greece drop the euro, U.S. multinationals could face tax complications, as Ramon Camacho, a principal specializing in international tax issues at McGladrey, the nation’s fifth largest accounting firm, explains in the guest post below. He points out that unless the IRS issues a regulation providing special relief (as it did in 1999 when the Euro was adopted) a Greek switch in currency could force companies to recognize taxable gains, even where no cash is received.

In this note I will analyze the arguments for and against Section 1706. First, I will explain the fundamental differences between an independent contractor and an employee, as well as the confusion between the two that required Congress to act. Next, I will detail the enactment of Section 530 of the Revenue Act of 1978 and its effect on the problem of worker classification, explaining both the immediate aftermath and the long-term implications for workers. Then, I will discuss the origin of Section 1706, detailing its impact on federal taxation and the technological community. Finally, I will turn to the heated debate that began in the aftermath of Stack's violent actions and determine whether, despite his methods, that angry taxpayer had a valid point. Given the combustible nature of the present national dialogue, it is important to know if people like Andrew Joseph Stack have some method underlying their madness.

An anonymous donor on June 8 paid $3.46 million to Glide, an antipoverty group in San Francisco, for the privilege of having lunch with Warren Buffett.

Is the donation tax-deductible? Experts say most of it probably is, meaning taxpayers in effect will pick up about $1.2 million of the tab. ...

Like any other charity, Glide will have to send the donor a letter saying how much of the gift is tax-deductible, and the assessment must be able to withstand a challenge by the IRS. Last month, the U.S. Tax Court, in a case known as Mohamed v. Commissioner, denied an $18.5 million charitable deduction by a California couple who didn't have correct paperwork before they filed their return.

Experts expect Glide's letter to exclude the fair-market value of the lunch from the donation total. The law mandates a disallowance for any goods or services received in connection with the donation, such as the lunch, which includes Mr. Buffett, the donor and up to six invited guests. The fair-market value is the cost of the prepared food to regular diners, not the purchase price of the groceries at a market.

What is Mr. Buffett's company and conversation worth? Nothing, under an IRS rule in effect since the mid-1990s. It deems "celebrity presence"—as when a famous artist gives a museum tour to a donor who has won it in a charity auction—to have no value in and of itself. Mr. Buffett has specified that talk of investments is off limits, so he isn't providing a service.

The ABA data shed considerable light on how poorly the 2011 graduates fared. We can now say with certainty that the employment picture is far worse than previously reported. Only 55.2% of all graduates were known to be employed in full-time, long-term legal jobs. A devastating 26.4% of all graduates were underemployed.

Here are the Top 25 and Bottom 25 law schools ranked by the percentage of the Class of 2011 with full-time long-term legal jobs:

School (U.S News Rank)

Full-Time Job %

School (U.S News Rank)

Full-Time Job %

1

Virginia (7)

94.7%

171. Phoenix (Tier 2)

37.4%

2

Columbia (4)

94.1%

172. Southern (Tier 2)

37.1%

3

Stanford (2)

91.1%

173. CUNY (113)

36.9%

4

NYU (6)

90.1%

174. Detroit (Tier 2)

36.8%

5

Harvard (3)

90.1%

175. Florida Coastal (Tier 2)

36.6%

6

Chicago (5)

88.2%

176. Toledo (129)

36.5%

7

Yale (1)

87.8%

177. N. Kentucky (Tier 2)

36.3%

8

Pennsylvania (7)

84.3%

178. Pace (142)

36.0%

9

Duke (11)

82.1%

179. American (49)

35.5%

10

G. Washington (20)

81.3%

180. NY Law School (135)

35.5%

11

LSU (79)

81.3%

181. Quinnipiac (113)

34.6%

12

UC-Berkeley (7)

80.0%

182. Southwestern (129)

34.6%

13

St. Mary's (Tier 2)

78.3%

183. New England (Tier 2)

34.4%

14

Alabama (29)

78.0%

184. San Francisco (106)

34.2%

15

Northwestern (12)

77.0%

185. Florida A&M (Tier 2)

34.2%

16

Cornell (14)

76.1%

186. Ave Maria (Tier 2)

33.0%

17

Michigan (10)

75.5%

187. La Verne (Tier 2)

32.8%

18

Mississippi College (Tier 2)

75.3%

188. Western St. (Tier 2)

32.2%

19

Arizona (43)

75.3%

189. Liberty (Tier 2)

31.1%

20

Vanderbilt (16)

73.7%

190. Appalachian (Tier 2)

30.8%

21

Kentucky (62)

71.9%

191. Western N.E. (Tier 2)

30.1%

22

Campbell (Tier 2)

71.4%

192. T. Jefferson (Tier 2)

26.0%

23

Baylor (51)

70.1%

193. Golden Gate (Tier 2)

22.0%

24

Texas (16)

69.9%

194. D.C. (Tier 2)

20.5%

25

Florida State (51)

69.5%

195. Whittier (Tier 2)

17.1%

Schools ranked in the U.S. News Top 35 with the largest underperformance in the full-time long-term legal job rankings:

Luca Andriani (University of London), Tax Morale and Pro-Social Behaviour: Evidence from a Palestinian Survey: The Palestinian context is missing in the tax morale literature. Hence, in this paper we consider public spirit and associational activity two major expressions of pro-social behaviour and we estimate their impact on Palestinians’ tax morale (intrinsic motivation to pay taxes). The empirical analysis uses a unique dataset based on a survey conducted by the Palestine Economic Policy Research Institute in 2007 in West Bank and Gaza Strip. By using a bivariate probit model, we find that tax morale increases with public spirit but it is lower among Palestinians involved in associational activities. Predicted conditional probabilities indicate that public spirit has more impact when the respondent has low confidence in the institutions and in the rule of law. Finally, more public spirit is required for a self-employee in order to deal with tax compliance than for a worker in the public sector, unless the worker in the public sector has lower confidence in the institutions and in the rule of law than the self-employee worker.

Arthur J. Cockfield (Queen’s University), The Limits of the International Tax Regime as a Commitment Projector: The paper examines how transaction cost approaches (as developed by North and Williamson) can inform international tax law and policy discussions. The international tax regime evolved institutions and institutional arrangements to address transaction costs such as the risk that two countries might doubly tax the same cross-border business profits. It mainly sought to reduce this risk by serving as a ‘commitment projector’ that enables governments to make credible political promises to taxpayers, other members of the public and other governments that they will not overtax these cross-border profits. As a result of these political commitments, taxpayers do not need to incur transaction costs they would otherwise have to sustain to identify and protect their global tax liabilities. In other areas, however, the international tax regime does not facilitate credible commitments. First, the international tax regime does not promote credible political promises to effectively address the growing policy concern of undertaxation whereby, as a result of tax planning, cross-border profits are frequently never taxed by countries with high tax rates. Second, because the international tax regime is not constituted by any binding supranational institutions, governments are afforded opportunities for unilateralism (such as the 2010 U.S. proposal to create a global tax reporting system via the Foreign Account Tax Compliance Act) that subverts credible commitments and raises transaction costs for economic participants.

Leo Martinez (UC-Hastings), The Incoherence of U.S. Tax Policy: The Environment as Case Study: The Internal Revenue Code is vast, complicated, and at times internally inconsistent. Nowhere is this inconsistency more apparent than the Code’s application to the environment. A survey of contemporary literature and public opinion show an increased awareness of and a recent focus on tax policy tooled for environmental protection. Indeed, though many Code provisions are explicitly environmentally flavored or can be easily seen to have an environmental component, there are many Code provisions that are at apparent odds with a sensible and cohesive environmental policy. The reality is that the Code is a complex stew of sound and unsound public policy, special interests, and situational pressures. This results in a Code that rewards the use of hybrid and electronic plug-in vehicles and encourages commuters to use public transportation and bicycles, while simultaneously promoting the use of motor vehicles with internal combustion engines, rewarding oil exploration and depletion of natural resources, and indirectly promoting urban sprawl. Against this landscape there exist structural and institutional barriers that impede reform. The paper uses just one aspect of the Code – the Code’s uneasy existence with environmental concerns – as the vehicle to evaluate the prospects for reform. This focus on a single area is undertaken with two underlying observations. First, the Code is necessarily complex. A focus on a single area is manageable and serves as a useful case study. Second, the issues we all face as a result of a degraded environment provides the possibility that attention will be paid. The paper will move from the general to the specific, first highlighting the strengths and the weaknesses of the Code, and second, highlighting structural problems that affect tax policy. The aim will be to guide legislators and policymakers toward a sane tax policy.

Thomas Stratmann (George Mason), Wireless Taxes and Fees: A Tragedy of the Anticommons: Combined federal, state, and local taxes on wireless services are about twice as high as the average retail sales tax. While the normative justification for above-average taxation of wireless service is weak, there is a compelling public-choice explanation: The mobile service tax base appears to suffer from a tragedy of the anticommons. That is, multiple parties have the power to block or partially block access to a resource, resulting in underutilization of the resource. In our context, numerous overlapping tax authorities seek to obtain revenues through wireless-service taxation and this may lead to overexploitation of the tax base. The anticommons problem has two dimensions. First, the mobile-service tax base funds numerous distinct projects at each level of government. Second, the base is taxed by numerous overlapping levels of government. We use state-level data from three years to examine the possible economic, demographic, and political factors that might explain the variation in these rates. We find that wireless tax rates increase with the number of overlapping tax bases.

This study uses a large panel of tax returns from 1999 to 2008 to investigate how taxes affect the decision to realize gains. The study distinguishes the persistent effect of tax changes from the transitory effect. Similar to earlier studies in the literature, we use the generalized Tobit model to address the sample selection problem and the endogeneity problem in the tax variables, but we improve the identification of the tax elasticity by using the presence of carryover loss as an exclusion restriction. We also control for the financial sophistication of taxpayers because that could be an important source of omitted variable bias. The preferred persistent elasticity estimate is -0.79, and the transitory estimate is -1.2. Those estimates are statistically significant and are robust to a number of sensitivity tests. Although we focus our examination on personal capital gains, we also compare the results of our model to results from the original model applied to contemporary data, estimate our model on subperiods, and estimate our model on other types of capital gains. We find that passthrough capital gains are highly sensitive to persistent tax changes, but gains from mutual fund distributions are extremely insensitive.

The IRS today issued temporary regulations (T.D. 9593) and proposed rules (REG-141832-11 on the portability of a deceased spousal unused exclusion amount applicable where the death of the first spouse occurs on or after Jan. 1, 2011.

The NYU Tax Controversy Forum brings together representatives from the government and expert private practitioners to compare perspectives on a wide range of topics involving federal tax audits, appeals, and litigation. Coverage encompasses a broad scope of controversy work, from international issues to ethical problems, sensitive audits, and various tax penalties.

The Supreme Court recently held that Treasury Regulations are subject to the same standard of administrative review as regulations promulgated by other agencies. This panel discusses the deference that courts must now give to Treasury Regulations and other IRS positions, such as Revenue Rulings and litigating positions, and explains what tax practitioners need to know about the Administrative Procedure Act. The panel also discusses Home Concrete vs. United States, a recent decision from the Supreme Court.

Thomas A. Cullinan (Partner, Sutherland Asbill & Brennan, Atlanta)

Kristin E. Hickman (Professor of Law, University of Minnesota Law School)